If you think you’ve had enough on your plate trying to stay ahead of all the new legislation regarding pay transparency, job advertising/posting, website accessibility, and more … it’s about to get worse. There is a plethora of new AI-related legislation that is going to impact both recruiters and their clients. Here are just a few:
- California—SB53, the “Transparency in Frontier Artificial Intelligence Act,” went into effect on January 1st. This is the first state law that applies to “frontier” AI systems, which are essentially very large, advanced AI models trained on massive data sets with extremely high compute thresholds (think OpenAI). While it’s not specific to recruiters, many in the industry are watching this because (a) what starts in California tends to spread elsewhere, and (b) this could be the de facto model for national policy since no other comprehensive federal legislation exists.
- Colorado—SB 24-205, which goes into effect June 30, 2026, requires new compliance obligations for entities doing business in Colorado (regardless of their location) and using “high risk” AI tools in employment decisions. “High risk” tools include any AI system that makes or influences significant hiring decisions. Compliance requirements include bias audits, maintaining documentation, confirming that vendors meet legal and ethical standards, and assuring that final employment decisions aren’t fully automated.
- Illinois—HB 3773 amended the Illinois Human Rights Act to expressly prohibit employers from using AI tools that have the effect of subjecting candidates to illegal discrimination. The law also requires employers to notify employees and applicants when and how AI is being used in the employment process.
- New Jersey—The state of New Jersey adopted regulations in 2025 governing disparate impact discrimination in the workplace, which includes the use of automated tools. These tools must be evaluated to ensure they do not have a disparate impact, noting that automated tools can replicate and worsen existing workforce imbalances. An example might include a resume-scoring tool that mirrors the demographics of a non-diverse workforce.
- Texas—New legislation (HB 149) has limited impact on covered private employers, focusing more on the use of AI tools within the government.
- EU AI Act—This act classifies AI systems by risk, with strict requirements for “high risk” environments.
- EU GDPR Article 22— restricts employment decisions basely solely on automated processing.
- The EU Data Act works in conjunction with EU AI Act and GDPR Article 22 to give users broad rights to access and share data on connected devices.
This is in no way a comprehensive list and also does not serve as legal advice. As always, talk to your attorney to ensure you are in compliance. The flip side of the new laws are the lawsuits that emerge – like the Workday case, or this one about Otter.
Read more about AI-related legislation: